SCHOOL BOND CHANGES SOUGHT

County treasurer wants new law after Poway controversy

He endorsed a call for a county grand jury investigation into the Poway bond that was made by a resident at a Monday night school board meeting.

Poway Unified officials did not respond to requests for comment on McAllister’s proposals. District officials have stood by their CAB deal, saying it allowed the district to capitalize on low construction costs and is only one piece of its larger $377 million bond program, which carries a more palatable 4.24 repayment ratio. Inflation, they said, will also lessen the burden on future repayments.

Ahead of any legislative changes, McAllister urged districts to be clear with voters about such bond maneuvers and spell out the repayment terms. He also recommended districts not enter deals with repayment terms exceeding four times the principal.

McAllister indicated his office would be ramping up its oversight role related to CABs, urging districts to consult with his office before finalizing such bonds. He said CABs requiring repayment more than seven times the principal will be deemed “unacceptable,” while repayment between five and seven times will be “cautionary,” and four times or less will be “acceptable.”

He said clear summaries of all future school district bond issuances will soon be posted on the San Diego County Treasurer-Tax Collector website to help the public track and monitor tax commitments made by district officials.

McAllister’s proposals were also embraced by Los Angeles County Treasurer Mark Saladino. In May 2011, Saladino issued a public notice that his office would not support CABs that exceed a 25-year repayment schedule, saying that they “result in a significantly higher debt burden.”

Michigan banned CABs in 1994.

McAllister said he and Saladino will also work with the California Association of County Treasurers and Tax Collectors to push for reforms; the group said last August it opposed long-term CABs.